Jakarta – Indonesian authorities were Monday investigating past liquidity support for banks given by the central Bank Indonesia while its chairman remains embroiled in the Bank Bali controversy.
The Supreme Audit Board (BPK) is investigating 16 banks that received Bank Indonesia liquidity support and is also looking at Bank Indonesia's role as lender, BPK chairman Billy Judono said after meeting Vice President Megawati Sukarnoputri.
Judono said it would be "strange" if Bank Indonesia officials emerged as being totally guilt-free in the controversy involving 89 trillion rupiah (about 10.3 billion dollars) in liquidity support.
During the currency crisis that started in mid-1997, a government guarantee scheme saw Bank Indonesia provide liquidity support to banks in trouble, he said.
However, the government has since not been able to agree with the central bank over the amount issued in liquidity credits. The government does not recognize the 89 trillion rupiah in support claimed by the central bank to have been issued to the banks.
The government, which has to repay the liquidity credits to Bank Indonesia, does not agree with the central bank's policies and criteria used in dispensing the support, saying that some of the banks were clearly not eligible.
Judono said banks or officials who refuse to cooperate in the investigation may face court because their action could be deemed as an attempt to destroy evidence. "We are still analyzing it [Bank Indonesia's responsibility]. I think it will be strange if Bank Indonesia bears no guilt at all," he said. The People's Representative Council (DPR) has tasked the BPK to investigate the central bank's role in the case.
Meanwhile, Bank Indonesia governor Syahril Sabirin denied he was present at a meeting at a hotel in South Jakarta to discuss the disbursement of Bank Bali interbank claims.
"If I attended the meeting, I should have already resigned as pressured by Gus Dur," Sabirin said, referring to President Abdurrahman Wahid's popular name.
Wahid has said that reports from the attorney general indicated that Sabirin was guilty of involvement in the Bank Bali scandal. He said that he had asked Sabirin to resign but the central bank governor has so far refused to comply.
Speaking to reporters prior to a hearing at a People's Representative Council (DPR)'s commission, Sabirin said "I'm the one who knew for sure whether I was present at the meeting or not. I reiterate that I didn't attend the meeting." Former State Enterprise Minister Tanri Abeng said at a hearing in South Jakarta district court that Sabirin attended the meeting at Mulia Hotel in June 1999 to discuss the disbursement of Bank Bali interbank claims.
Abeng gave evidence as a witness in the trial of Djoko Chandra, the president of PT Era Giat Prima (EGP), a private company linked to the former ruling Golkar party.
Chandra is on trial for his role in transactions between PT Bank Bali and EGP. Last year, Bank Bali paid EGP 546 billion rupiah (about 80 million dollars then) to facilitate the recovery of 904 billion rupiah in interbank claims owed by the government to the bank.
However, the commission should not have been necessary as the interbank loans were guaranteed by Bank Indonesia. The issue also led to allegations that close advisors of former president BJ Habibie were also involved in the scheme and that the proceeds were to be used to finance his re-election campaign.